Dakota Turkey Growers Pay Off Shady EB-5 Loan They Never Needed
"We're debt-free!" shouts Dakota Turkey Growers. According to a press release processed by the Huron Plainsman today, the Huron turkey plant has paid off the loan it received in 2009. That loan was $55 million dollars from 110 foreign investors seeking EB-5 visas.
Dakota Turkey Growers eagerly celebrates the EB-5 program:
According to Dakota Turkey Growers officials, the Federal EB-5 Program was instrumental in helping it grow a profitable business, which currently provides direct jobs to over 800 workers in Huron.
The officials went on to say that the availability of EB-5 funds was pivotal in Dakota Turkey Growers’ operations and success and that former Governor Mike Rounds was also very supportive of and assisted in the start-up of Dakota Turkey Growers [staff report, "Dakota Turkey Growers Fulfills Federal EB-5 Obligation in Full," Huron Plainsman, 2014.10.31].
Worth noting: Jeff Sveen, who has served as chairman of the board and corporate agent for Dakota Turkey Growers, has contributed $3,000 to the Rounds for Senate campaign. Brenda Rutledge, who I'm going to take a wild guess and say is the wife of Dakota Provisions (corporate names are fluid here) CEO Kenneth Rutledge, has given Rounds for Senate another $1,000.
Remember that EB-5 money is supposed to create jobs. We learned last fall that this big EB-5 loan did no such thing; it simply replaced debt that Dakota Provisions had already used to build and start its Huron turkey plant.
South Dakota's EB-5 impresario Joop Bollen was working on this EB-5 deal for Jeff Sveen and his turkey plant friends in 2008. In a February 6, 2008, e-mail to Chinese EB-5 recruiter Linda He, Bollen explained why Dakota Provisions was a guaranteed win for EB-5 applicants:
The most important issue, I believe, is that this project is already in operation and therefore all the start-up cost and risks are gone [Joop Bollen, e-mail to Linda He, 2008.02.06].
Hold on there—EB-5 recruiters aren't supposed to guarantee returns. EB-5 investments are supposed to be at risk.
Yet Bollen affirms that EB-5 investors can't lose money, because the Hutterite owners have tons of money to protect the project:
Frank [Lin, EB-5 recruiter] also might have explained that the turkey plant is owned by 40 plus Hutterite colonies which have very deep pockets and would never let this plant go as their turkey industry would be in deep trouble if they loose [sic] the plant. The colonies would commit financial suicide for their turkey growers if the plant were lost [Bollen to He, 2008.02.06].
Bollen adds this assertion of solid business performance:
Additionally it is important to realize that the project is currently being financed by US Banks which are very happy with the performance of the project [Bollen to He, 2008.02.06].
Put the Hutterite and bank comments together. Bollen is telling his recruiter that the plant is running fine and that it has a huge capital reserve to draw on to deal with any problems. Bollen is essentially saying that Dakota Provisions was doing just fine and was on course to create jobs without any EB-5 money. Like so much else about the Bollen-Rounds EB-5 program, this claim of solvency, along with the darn-near guarantee, sounds fishy.
And fishmonger Bollen knew he had to be careful with what he said about Dakota Provisions. Consider this response to a question from recruiter He's question about obtaining a third-party guarantee on the investments:
The project already would be collateralized mcuh more than what is demanded by commercial banks and therefore it would be somewhat insulting to request this from the plant, not to mention US immigration law which might frown on the guarantee! As you might recall, the EB-5 monies have to be at risk and a guarantee might raise a serious red flag [Bollen to He, 2008.02.06].
Bollen even says in so many words that they shouldn't spread their plan around in too much detail to U.S. observers:
In fact, I am somewhat concerned that those banks might become quite upset once they their [sic] loans are being replaced with EB-5 monies (We should keep this fact somewhat confidential from a US perspective).... In addition, the State of South Dakota also lent $3,000,000 which they would not have done unless the loan officers felt comfortable [Bollen to He, 2008.02.06].
The money local banks lost in this EB-5 loan replacement also meant revenue lost by the State of South Dakota, since Bollen's EB-5 shadow corporation, SDRC Inc., paid no bank franchise tax on the EB-5 loans it arranged.
So yes, congratulations, Dakota Turkey Growers on exploiting a federal visa investment program you didn't really need, whose conditions for new job creation you didn't really fulfill, and which you are now inflating into fabricated cover for your favored political candidate, Mike Rounds, from the monkeyshines Joop Bollen used to line his pockets and the pockets of Mike Rounds's friends.
- South Dakota
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